Regional

December sees the UK coming out of Lockdown and into a revised 3 Tier system, although perhaps not a lot of change in day-to-day life. As well as navigating the ever-changing world with Brexit negotiations.  There is a return to some high street shopping and hospitality, venues who have been able to adapt to open with winter friendly outdoor seating are seeing steady traffic but are still challenged by working within new strict limits of serving alcohol with a substantial meal (although a scotch egg counts!) and mixed household limits. 

UK Shoppers have continued to dial up their online purchasing and we have seen Christmas shopping starting early and may be longer. Key categories are in steady growth, tracking at 12.4%+ vs. last year, this is a trend that will look to continue as online becomes more of the day to day purchasing shopping habit. 

Within the grocery sector, consumers shopping choices have seen massive increase in those wanting to cook at home, winter has seen an emergence of posh coffee at home as well as slow cooked meals and winter barbecues.  The entire supermarket industry is up 13.2% which is an opportunity for NZ businesses with strong relationships to see continued increase in demand. 

Private Label offering and share is declining to 33.9% in the last quarter from its 52 w/e figure of 34.2 as consumers resonate more with brands.  This is potentially good news as people trust brand New Zealand and may also trade up and treat themselves in this super premium sector over the festive season. 

Positive vaccine developments and the first vaccinations given on 8th December, have helped to drive FTSE 100 growth, however the government is forecasting that unemployment will be back to levels seen in the last recession in 2009.  Closures of high street retailers like Topshop and Debenhams are adding to this. 

As the snow threatens to make an appearance, yearning for a bit of joy from home has never felt so needed, especially at this time of year.  With the difficulties of limited opportunity to connect ‘in real life’ with home, sharing the amazing initiatives like Whānau – Voices of Aotearoa far from home at the Royal Albert Hall gives a well needed warm boost.

Spring is here bringing spectacular daffodils and a loosening of covid-related restrictions. Schools are back and small gatherings are allowed outside now but realistically it will be June before we are allowed to socialise in groups inside, ironically just as the sun comes out!

The impact of Brexit for business is reflected this month in a continued drop in shipments between the UK and the EU.  Business leaders attribute this trend to a number of factors: British businesses stockpiling inventory before the UK left the EU, the difficulty in navigating the post-Brexit paperwork needed and also changing official advice.

British exports to the EU year on year dropped 38%, and its exports to the rest of the world were down 7.5%.  At the same time, Britain imported fewer goods.  Imports from the EU were down almost 16% and those from the rest of the world dropped more than 9%. Despite these challenges, the UK is definitely open for business, and continues to proactively work with other exporting nations even as friction in cross-border commerce increases.

Although business leaders in the UK anticipate continuing instability between the UK and the EU in the months ahead, this environment also creates increased opportunities for NZ businesses across sectors to seek opportunities and market share.

Where are we spending (UK Focus):
Overall consumer spending contracted by 13.8% in February as national lockdowns continue, but we are seeing some signs of recovery compared with January as essential spending increases. This has been driven by strong spend in supermarkets and record year on year spend growth at food & drink specialist stores. Overall there has been a 14% increase on retail spending in February vs January, driven by a 21% increase in grocery and general household spend seeing a 10% increase. Retailers with a considered online presence benefitted from a 43.3% increase in sales. 

Food & drink specialists, electronics, Home & DIY improvements are leading the charge as the nation gets ready for spring.  Digital content & subscriptions are still driving steady growth at 42.6%, while the hospitality, travel and leisure industries unsurprisingly continue to see negative growth.  As we all still remain at home, takeaway food delivery apps continue to benefit and online eating and drinking spend grew by 92.6%.  

We take delight in seeing those septuagenarians and above strutting the streets with a skip in their step and a smile in their eyes, as the vaccine roll out continues with great success.  There’s a real sense of optimism with longer days and the knowledge that more and more people each day are protecting themselves and their loved ones by taking the vaccine.